The Central Bank of IrelandIreland's financial regulator and part of the Eurosystem. published its Bank Lending to Irish Businesses statistics for the second quarter of 2026 on 15 October 2026. The headline for company owners is cost: SME lending rates rose, with the weighted average interest rate on new bank lending to Irish SMEs up 44 basis points to 5.59%.
This post sets out the key figures, what they mean for Irish limited companies, and the practical steps to take if your company has borrowing or plans to borrow. For published bank and non-bank rates, see our evergreen guide to business loan interest rates in Ireland.
What did the Q2 2026 SME lending rates show?
- Rate on new SME lending: 5.59%, up 44 basis points on the previous quarter.
- Rate on outstanding SME loans: 4.96%, up 17 basis points.
- Gross new lending to SMEs: €1.2 billion, down 2.4% on Q1 2026 and down 0.4% on Q2 2025.
- Net lending: marginally positive at €11 million, down from €132 million in Q1 2026. It was the second net-positive quarter in a row.
- Outstanding SME lending: €14.5 billion. Retail and hospitality is the largest sector at €3.2 billion, followed by construction, real estate and development, and primary industries at €3.1 billion each.
New-lending rates rose in every economic activity except human health and social work. Most sectors saw increases of 18 to 48 basis points. Retail and hospitality was the largest contributor to new lending for the second quarter running, up €41 million on a year earlier, while manufacturing fell by €48 million and construction, real estate and development by €43 million.
Why the rise?
The Central Bank notes that the ECB deposit facility rate rose by 25 basis points during the quarter and by a further 25 basis points in September. The September rise came after the period these figures cover, so it is not yet reflected in them.
A note on comparisons
The June 2026 release replaced the Central Bank's earlier SME and Large Enterprise Credit and Deposits publication. Source data and sector classifications changed, and the Central Bank describes a break in the series, so be careful comparing these figures with older reports.
Where is bank lending going?
The figures show banks are still lending, but not growing their SME books much. Gross new lending of €1.2 billion in a quarter is steady, while net lending of just €11 million means repayments almost matched new loans. Property-related lending (down €37 million net) and manufacturing (down €17 million net) shrank, while primary industries (up €32 million) and health and social work (up €23 million) grew.
For companies in retail and hospitality, the sector with the most new lending, the figures suggest banks remain open to good proposals. For manufacturers and property-linked businesses, expect closer questions about cash flow and security.
What does it mean for Irish limited companies?
Bank borrowing is getting more expensive. If your company has a variable-rate loan linked to ECBThe key interest rates set by the ECB for the euro area, including the main refinancing rate and deposit facility rate. rates or Euribor, repayments are likely to rise as rates move. New loans are being priced higher than the existing book, so refinancing will not automatically save money.
The 5.59% figure is an average across banks, sectors and loan sizes. It is not a quote. Your rate depends on the lender, the amount, the term, any security and your company's trading record. Non-bank lenders price differently and usually charge more than banks, so compare the total cost of credit, not just the headline rate.
Rate rises also affect affordability tests. A lender looks at whether your cash flow covers repayments with room to spare, so a higher rate can reduce how much your company can borrow, even if trading has not changed.
Illustrative example: on a €100,000 variable-rate balance, a 0.44 percentage point rise adds roughly €440 a year in interest, falling as the balance is repaid.
What should your company do now?
- List all company borrowing and note which loans are variable and when any fixed periods end.
- Stress-test repayments with our DSCR calculator, using a rate at least one percentage point higher than today.
- If you are planning a growth project, check whether the SBCI Growth and Sustainability Loan Scheme fits. It offers reduced rates, and you apply directly to a participating lender.
- Before comparing offers, read our guide to flat rate, APR and total cost, and see our neutral directory of business lenders in Ireland.
- Avoid scattering applications. Lenders that search the Central Credit Register leave a record of the enquiry on your company's report, and lenders must check the register for applications of €2,000 or more.
- Ask any lender whether it is regulated by the Central Bank. Regulated lenders must follow the SME Lending Regulations, including giving written reasons if they refuse a micro or small enterprise.
How Welcome Finance can help
Our panel of five specialist non-bank lenders can consider unsecured and short-term business loans, working capital loans and merchant cash advanceA form of finance where a provider advances a lump sum in return for a fixed percentage of the company's future card takings until an agreed total is repaid. for established companies. These usually cost more than bank loans, so we'll be clear about the total cost. Approval is never guaranteed. Welcome Finance is a commercial finance broker, not a lender, is not regulated by the Central Bank of Ireland, and arranges business-purpose finance only for companies registered in Ireland (LTD, DACA type of Irish private company under Part 16 of the Companies Act 2014 that keeps an objects clause in its constitution, limiting what it can do, and uses the suffix DAC., PLCA company type under Part 17 of the Companies Act 2014., ULCA company under Part 19 of the Companies Act 2014 whose members have unlimited liability for its debts.).